NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

While the OFFICE of President remains in highest regard at NewEnergyNews, this administration's position on the climate crisis makes it impossible to regard THIS president with respect. Below is the NewEnergyNews theme song until 2020.

Editor’s note: The use of software is increasing so rapidly in every aspect of the utility business that they are almost beginning to merge.

More utilities are discovering that going digital puts them where their customers are. Almost any commercial transaction consumers have today includes a digital, online, and/or mobile option. Customer satisfaction measurably rises with interactions that are personal, self-service, and available 24-7. Like the rest of the retail world, utilities are turning to digital to engage customers in these ways. They are now competing for better ways to engage customers and it is paying off in more than just customer satisfaction. Regulators granted utilities in the bottom quartile of customer satisfaction ratings a lower percentage of their requested rate of return than utilities in the top quartile, according to
an April 2015 study by PwC. In addition, customers who trust their utilities are less likely to turn to disruptive competitors.

Successful customer engagement also helps utilities meet energy efficiency mandates, smooth peak loads, and implement new rate designs. But getting participation in programs is difficult when customers’ only interaction with the utility is a monthly bill. They are finding that delivering personalized information, tips, and alerts through an app is effective at winning that engagement. But digital portals, and especially apps, can be too complicated so utilities are putting time and money and effort into turning digital customer engagement into successful marketing tool. They are working with private sector giants like Oracle Utilities, Whisker Labs, Honeywell-branded Whisker Labs, Bidgely, Tendril, Powerley, and Simple Energy… click here for more

Editor’s note: California is leading the charge to build a power sector that can do without fossil fuels. But it is not easy.

Accelerating clean energy and climate goals in California have policymakers thinking in unprecedented ways about how to manage the state’s power system. California’s utilities already face a 50% renewable energy mandate to hit by 2030, and now lawmakers are debating even more ambitious targets. But California’s grid operator, the California Independent System Operator (CAISO), says the state faces a complicated energy trilemma in reaching its goals: Renewables over-generation, excess natural gas capacity, and a potential shortfall of flexible generation. Policymakers are just beginning to understand how to deal with it.

To reach the state’s goal of a 40% reduction in greenhouse gas emissions by 2030, Laura Wisland, senior energy analyst at the Union of Concerned Scientists (UCS), said much of the natural gas generation that provides energy and reliability services will be replaced with non-carbon resources like renewables, energy storage, load shifting, and targeted energy efficiency. Today’s system is much different than Wisland’s vision. Natural gas generation was 53.8% of
the CAISO installed power mix
in April 2017. Renewables were 29% of the mix, with solar providing 14% of demand and wind 8.5%. CAISO forecasted natural gas generation would serve 61% of the state’s peak demand by 2017’s summer, with 13.7% to come from solar and 2.5% from wind. And Jan Smutny-Jones, CEO of the generator trade group Independent Energy Producers Association, said California must move cautiously to protect system reliability and affordability… click here for more

TODAY’S STUDY: The Choices In The Next Big Fight For Solar

California has committed to rapid decarbonization of its power sector. The state is pursuing that objective through a wide range of policy solutions, one of which is net metering, an incentive encouraging customer adoption of renewable distributed generation, especially solar.1 To date net metering has supported the adoption of solar by over 725,000 California customers, totaling nearly 6 GW of installed capacity.2 These adoptions have contributed to reductions in greenhouse gas emissions from the power sector and local job creation. Net metering has been a success by many of California’s key measures.

Looking forward, California’s path to decarbonization assumes increased reliance on renewable energy, including estimates of up to 16 GW of behind the meter solar by 2030.3 Achieving these targets would require accelerated customer adoption of solar. But as analyses of California’s electric system have demonstrated, continued growth in generation during day-time solar peak periods creates two challenges: excess generation at the system-level and grid constraints at the distribution-level. Excess generation at the system-level has been demonstrated by increasing negative prices and resource curtailment, including of renewable generation.4 Distribution-level grid impacts have been demonstrated through analysis of distribution system hosting capacity showing limited capacity to absorb midday solar production in areas of high-solar penetration.5

At their core, these challenges are the manifestations of misaligned power supply and demand. Going forward, rather than spread like seeds in the wind, solar energy needs to be planted at locations advantageous to the grid and needs to produce simultaneous with demand, or stored until there is demand. Solar alone will not suffice; it needs to be locationally targeted and co-located with storage. 6

Meanwhile, California policy-makers have continued to push for differentiation of incentives for solar by location, ensuring grid costs are fairly recovered, and enabling customer choice. A clear need for balancing these objectives with the State’s decarbonization imperative exists.

This paper reexamines net metering, asking how to build on its success to further California’s decarbonization, account for location value, fairly recover grid costs, and enable customer choice. Evaluating alternative policies and applying consistent criteria reflective of California’s principles this analysis identifies advantages and disadvantages to net metering and variations thereof. Based on this analysis we conclude California can sustain solar beyond net metering. We recommend California policy-makers move expeditiously to transition the state’s solar compensation framework toward a net billing structure with locationally differentiated prices paid for exports. As detailed further in this paper, the transition may be eased in several ways and informed by data and insight gained through evaluation of current net metering policies, helping to sustain growth in customer adoption and achieve forecasted levels of solar…

In D.16-01-044 the CPUC asked staff and stakeholders to “explore compensation structures for customer-sited DG other than NEM, including analysis and design of potential optional or pilot tariffs, with a view to considering at least an export compensation rate that takes into account locational and time-differentiated values of customer-sited DG.”9 In the spirit of this call to action, the following potential compensation structures for California were identified through stakeholder engagement and research on how other states are compensating customer generation. These options do not represent an exhaustive list of possible compensation frameworks, rather a reasonable cross-section reflecting ongoing trends in California’s energy policy landscape. This section introduces those options; a later section evaluates them.

Several new concepts are included within these options. They are introduced in the context of the following explanations of each option.

OPTION 1 | NEM 2.0

This option reflects the status quo. The only exception to current practice we contemplate is the possibility of further evolution of TOU rates to allow those rates to more specifically reflect grid conditions, including a) greater peak-to-off-peak rate differentials, b) greater locational rate specificity, and c) further shifts in TOU periods on daily or seasonal basis.

OPTION 2 | NET BILLING

This option reflects a net billing core structure with exports compensated at the resource’s Locational Value, an export price informed by the Locational Net Benefits Analysis (LNBA). 11 The LNBA is a methodology being developed under the supervision of the CPUC which differentiates the value of customer generation by location, as illlustrated in Figure 3. Depending on how the administratively set locational values are determined, this export price could differ between customers. To enable a predictable return for the investing customer, it is assumed that the export price paid to an enrolling customer would be fixed for a practical duration and variable following that duration, updated periodically, based on refreshed LNBAs. It is assumed the valuation is updated annually to allow newly enrolling customers to be compensated at refreshed pricing. Two additional features of this option may be considered to support customer adoption. First, would be the inclusion of a Market Transition Credit.

Awarding additional temporary compensation to a customer generator during a defined period (e.g., 5 years, indexed to total customer adoption, up to percent of system peak) that ramps down over time but recognizes the importance of continued clean energy development. There are many ways such a credit could be structured. Here we envision a “step- down” Market Transition Credit, whereby an adder to the LNBA-based export price tapers down to zero out over time. The scale and pace of the stepdown could be benchmarked to installed capacity, like early California Solar Initiative rebate designs. Second, would be the allowance of Transferrable Credits.

TRANSFERRABLE CREDIT

Allowing credit earned by a customer generator for exports to the grid to be transferred to any other customer at the discretion of the customer generator. 11 For additional background on the LNBA, see for example, Southern California Edison Compnay’s Demonstration Project B Final Report at https://drpwg.org. Because the net billing framework suggested here compensates exports at a price reflecting their Locational Value, credits earned for these exports could be transferred to any other customer. The impact of transferrable credits would depend on whether the generator must be “sizedto-load,” as is the case under NEM 2.0. We envision that requirement being lifted. Finally, we contemplate the exports may also be eligible for participation in grid services on an opt-in basis.

GRID SERVICES

Market-based compensation for DER providing energy, capacity, voltage support, frequency regulation and resiliency pursuant to an identified grid need. Compensation may be at wholesale or distribution level.12 Compensation to customers opting into grid services would be an alternative to administratively determined export prices, such that the customer chooses one or the other, but is not eligible for both.

OPTION 3 | NET BILLING + GRID SERVICES

This option reflects a net billing core structure with exports compensated at market prices based on their participation in grid services markets. Whereas in Option 2 the customer would be defaulted onto the administratively determined LNBA-informed export price with the option to opt-in to grid services markets, Option 3 would default the customer’s exports into grid services markets. It is assumed that aggregators will serve as the customer’s agent in participating in such markets, but individual customer participation is not precluded.

MARKET PRICE

Prices paid for grid services may be market-based resulting from competitive solicitations, participation in organized wholesale markets or other transaction platforms. Distinct from other contemplated pricing mechanisms which result from administrative value determinations (e.g., locational value, retail rate). An additional feature of this option would be a managed demand charge.

MANAGED DEMAND CHARGE

A rate design feature in which a customer receives a charge based on their maximum electric capacity usage during a defined interval in which capacity to serve customers is relatively scarce. Customers can reduce or avoid the charge through reduction of maximum usage through generation, changes in consumption, or use of storage technology to shift load. This feature is highlighted because it may provide a meaningful opportunity for a utility to recover costs for grid services unless the need for those services is reduced by a customer’s change in consumption or adoption of a storage technology. Volumetric charges may be reduced for customers receiving a demand charge.

This option reflects a buy all, sell all core structure with all production compensated at its Locational Value. An additional feature of this Option would be the inclusion of a Market Transition Credit. As summarized, customer consumption is metered separately from production, enabling customer participation in other programs such as demand response to be evaluated and rewarded distinctly.

OPTION 5 | BUY ALL, SELL ALL + GRID SERVICES

This option reflects a buy all, sell all core structure with all production compensated at market based export prices based on their participation in grid services markets. Whereas in Option 4 the customer would be defaulted onto the administratively determined Locational Value export price, Option 5 would default the customer’s production into grid services markets. It is assumed that aggregators will serve as the customer’s agent in participating in such markets, but individual customer participation is not precluded. In the next section, we turn to criteria which may be used to gauge the relative strengths of these options and an evaluation of their merits.

EVALUATING IDENTIFIED OPTIONS

Returning to the identified opportunity: net metering has proven potential to incentivize customer adoption of solar. But does net metering support the alignment of supply and demand and thereby help resolve key challenges facing California? Can those challenges be addressed while increasing affordability for all customers and preserving customer choice?

To evaluate the identified compensation structure options, criteria consistent with California’s principles must be identified. This evaluation begins with the stated principles of the CPUC in its DER Action…

RECOMMENDATIONS

This evaluation attempts to evenly balance criteria and concludes that Option 2, Net Billing with exports compensated at the LNBA-informed export price for solar would be a substantial improvement to current policy, allowing for locationally differentiated compensation, improved grid cost recovery, and deeper decarbonization though storage enabled alignment of solar supply and demand.

This structure would lead to three potential outcomes:

• where the LNBA-based price paid on exports provides an adequate return, customers will adopt solar (with or without storage) in areas advantageous to the grid, easing grid planning and operations while lowering grid costs;

• where the LNBA-based price paid on exports does not provide an adequate return, customers are incentivized to maximize self-supply, most practically achieved through solar plus storage;

• where neither the LNBA nor storage are advantageous to the customer, they will maintain the choice to adopt while making increased contributions to grid cost recovery.

These advantages are more acute where and when mature grid services markets can replace the LNBA as a tool for pricing exports. As more experience with grid services is gained, these advantages may become increasingly practical.

To ease the transition from NEM 2.0 to Net Billing, two measures are recommended. First, enable Transferable Credits, allowing credit earned by a customer for exports to be transferred to other customers at the discretion of the customer generator. This will introduce liquidity into the market, especially if “size-toload” requirements are lifted, allowing customers who are not in high-value locations to invest in those locations and receive corresponding reductions in their energy costs. Second, adopt temporary Market Transition Credits, smoothing the change from the current compensation levels to locationally differentiated levels. There are many ways this could be structured. One would be to “step- down” the Market Transition Credit in stages as the industry hits certain installed capacity benchmarks (similar to early California Solar Initiative designs). This step-down approach would have the added advantage of allowing for storage to scale up and reduce costs while signaling to industry that there will be a market for behind the meter storage.

Timely adoption of a Net Billing structure may also pave the way for grid friendly transportation electrification. Net metering would allow non-simultaneous netting of vehicle electrification load, an accounting tool which would undermine a principal benefit of vehicle electrification from a societal perspective (i.e., increased throughput leads to decreased rates). To the extent net metering continues into the next decade when electric vehicle adoption is forecasted to surge, a huge class of customers may come to expect low or zero cost service from the grid. On the other hand, a Net Billing structure would encourage electric vehicle customers to charge while the sun shines, or store their solar-generated energy to charge their vehicles at other times.

A final advantage of Net Billing deserves consideration: Net Metering’s reliance on the retail rate limits the flexibility of California policymakers – the price paid to solar is intertwined with retail ratemaking, a clunky policy making process with implications and complications extending far beyond customer generation. This approach has supported customer adoption to date because retail rates were going up and solar costs were coming down. It is not difficult to imagine these trends being reversed, with federal trade or tax policy turning against solar. Net Billing on the other hand compensates exports at a price determined by California policy-makers, allowing for the adoption of anchors and adders with relative ease compared to Net Metering. In this sense, Net Billing allows California alone to determine whether solar is sustained.

Based on this evaluation we recommend California policy-makers move expeditiously to transition the state’s solar compensation framework toward a Net Billing structure. As provided, the transition may be eased in several ways and informed by data and insight gained through evaluation of NEM 2.0, helping to sustain growth in customer adoption and achieve the levels of forecasted solar adoption.

“…[Unimaginably, seven Democrats are vying to challenge nine-term Congressman John Culberson for the seat long held by Republicans in the Seventh Congressional District of Texas and the Cook Political Report rates the race] a "toss-up."…[A climate forum held by the Houston chapter of 350.org,] Pantsuit Republic Houston — Climate and Environmental Racism Committee, Indivisible To Flip TX7, and Texans for Climate Change Action…[discussed the fact that] recent surveys debunk the misperceptions of voter apathy on climate. A survey by Harvard and Politico showed that Democrats rank climate change neck-and-neck with healthcare and Trump-Russia allegations as the top issues motivating their vote in 2018. Another survey showed that even most Republicans wanted President Trump to remain in the Paris Climate Agreement…

On a national level, the Trump administration has pushed for "red team, blue team" debates of whether to accept climate science…The discussion revealed a lot of common ground, but also distinctions…But the true value of the event might come less from what the voters learned about the candidates than from what the candidates learned from the voters. Simply put: We care…When voters care, candidates respond…Whoever is elected to Congress this November, they'll know there's a motivated contingent of voters eager to see a more vigorous federal response to climate…” click here for more

“…In the biggest blow he’s dealt to the renewable energy industry yet, [the president imposed] duties of as much as 30 percent on solar equipment made abroad…[This] threatens to handicap a $28 billion industry that relies on parts made abroad for 80 percent of its supply…The Solar Energy Industries Association has projected tens of thousands of job losses in a sector that employed 260,000…The tariffs are just the latest action Trump has taken that undermine the economics of renewable energy…The import taxes, however, will prove to be the most targeted strike on the industry yet…The first 2.5 gigawatts of imported solar cells will be exempt from the tariffs…[and the four years of tariffs that start at 30 percent in the first year will] gradually drop to 15 percent…[T]hey may represent a step toward making good on a campaign promise to get tough on the country that produces the most panels — China…[The solar industry may] attempt a long-shot appeal to Congress…” click here for more

“In response to growing interest in developing wind farms off California, the Navy in August published a map that shows where [floating] wind-energy projects and Navy and Marine Corps operations would overlap…The Navy had been asked to weigh in on the wind-power idea by the federal Bureau of Ocean Energy Management (BOEM). The agency serves as a gatekeeper for energy development 3 miles offshore and beyond and had received [competitive requests from an Trident Winds for a 650-to 1,000-megawatt floating wind farm, and Statoil Wind US]…[BOEM] is working with the state of California on planning…[The Navy map designated about 36,000 square miles of Southern and Central California, from the Mexico border to just shy of Monterey Bay,] as a red zone, meaning the construction of wind farms in those sectors was ‘not compatible’ with Navy operations…

The California coastline offers 112 gigawatts of technical offshore wind resource potential, much of it from floating turbines, according to Trident. That is more than 50 Diablo Canyons — about 1.5 times the state’s electric energy consumption…If the Navy sticks to its guns and blocks wind-energy projects off the coast of both Southern and Central California, the winner may be Humboldt Bay, where BOEM has also studied potential wind projects, colored green on the Navy map…The global offshore wind energy market was valued at $20.3 billion in 2016 and is expected to reach $57.2 billion in 2022, growing 16.2 percent from 2017 and 2022…UC Berkeley policy analyst Rob Collier says that because of supply chain needs for floating wind technology, the industry will be a huge boon to wherever the staging area is for the mammoth 700-foot-tall turbines that could and should be built nearby, not imported from China or elsewhere…” click here for more

TODAY’S STUDY: How New York Is Changing Its Power Sector

The economics that have driven America’s electric utilities have changed. For a century, utilities’ ability to make profit has depended on their investment in infrastructure, and their revenue has been tied to charging customers based on how much energy they use.

Yesteryear’s approach conflicts with today’s public interests—energy efficiency, less local air pollution, and decarbonizing our economy. It also conflicts with the technological advancements of the last several decades, which now allow energy to flow more freely through copper wires, much as data flows through the airwaves. Customers can now generate, store and even sell their own electricity. They are beginning to “see” their usage and make real-time decisions to change it.

None of this technological change reduces our need for affordable and reliable energy. Rather, in a warming world, that need has only increased. Major storms like Superstorm Sandy and Hurricanes Irene, Harvey, and Irma are painful reminders of how dependent our lives and economy are on electricity.

Around the United States, cities, counties, states and industry are investing billions of -dollars into grid modernization efforts to improve resiliency and future-proof the grid from a mounting wave of disruptive technologies. Together, America’s grid upgrade projects will be the largest infrastructure investment in history.

These efforts have the potential to generate incredible environmental and public health benefits, from reductions in local air pollution to massive reductions in greenhouse gas (“GHG”) emissions. None of these benefits are, however, guaranteed by a modern grid. They must be part of the plan, right along with resiliency and affordability.

The state of New York launched Reforming the Energy Vision (“REV”) to spark a transition of the state’s electric system to “achieve optimal system efficiencies, secure universal, affordable service, and enable the development of a resilient, climate-friendly energy system.”1

This whitepaper examines the approach taken by the New York Public Service Commission (“NYPSC”) and sheds light on the elements that must be included for electric utility modernization efforts to yield maximum environmental benefits.

1. Building a smart platform. A clean grid requires a fundamental improvement in the “intelligence” of the infrastructure, including a smart platform that allows customers to become an active part of the energy network and enables utilities and market participants to efficiently deploy a portfolio of generation. This requires the electricity system to evolve beyond poles and wires into a “distributed system platform”—a transactional platform that will function atop the distribution system.

2. Aligning utility earnings with environmental outcomes. REV is built around an electricity system that is heading toward decarbonization. A low- or no-carbon future is not debated; it is treated as essential. This, of course, creates a significant challenge to utilities that have not only relied on resources that burn fossil fuels, but have generated money mostly by selling more energy. Decarbonizing the energy system will require that environmental outcomes be valued and, therefore, desired by energy providers. If utilities have no incentive to foster the emergence of a cleaner grid, they will not do so. Utility earnings opportunities should arise from GHG emissions reductions, or at least from specific levers that utilities can use to influence GHG emissions reductions.

3. Engaging customers: transforming electricity buyers into market participants. Technology and new types of generation energy will surely play major roles in the modern grid. But actively engaged customers will be significant new players. In a future where grid flexibility is valued, customers who can generate energy or significantly alter demand will become as essential as power plants. For this reason, customers will require access to timely, detailed information about consumption, market signals that reward them for certain consumption decisions, and privacy and data ownership policies that allow them to securely share their energy data with any solution providers they choose. Moreover, to ensure a just transition, it will be essential to include low-income and vulnerable consumers in an effort to transform traditionally passive residential customers into full market participants.

The transformation of the U.S. electric industry now underway offers a unique and remarkable environmental opportunity. The imperative to achieve favorable environmental outcomes must remain in focus if that opportunity is to be fully realized…

Conclusion

Decarbonizing electric supply

Decarbonizing the economy entails decarbonizing generation, converting non-electric energy uses to electricity, and generally operating a leaner, smarter energy system. There are clear pathways for REV-type reforms to push all participants in the distributed energy marketplace in the direction of the cleanest DER and beneficial electrification, and to push the transmission and distribution utilities in the direction of greater efficiency and flexibility. However, in New York, it is expected that the future electric supply portfolio will continue to include large-scale generation, as contemplated in the CES Order.

A decarbonized electric generation fleet can take a number of different forms. Non-emitting resources can include a range of renewable energy generation, which may include solar, wind, and hydroelectric, as well as biogas and other technologies. All types of renewable energy generation have the advantage of not being dependent on exhaustible fuel sources, although some have disadvantages as well. Solar and wind-based generation are intermittent—meaning their output depends on weather conditions, such that these resources cannot necessarily be “dispatched” when electricity users demand power. Hydroelectric generation is eminently controllable, to such an extent that it can function as an energy storage mechanism, but impoundments cause significant environmental degradation, including material levels of methane emissions.117 Additionally, persistent drought conditions, which may be exacerbated by evolving weather patterns influenced by climate change, may limit the availability of some hydroelectric resources. Non-renewable technologies may also have a role to play in a decarbonized grid—and these technologies present trade-offs as well. Nuclear generation produces electricity without emitting GHG or other air pollution; however, it presents other serious environmental challenges, such as waste disposal. Nuclear generation is also incapable of being dispatched in response to demand because today’s nuclear plants are designed to operate at a particular level of output at all times. Even fossil fuel combustion may be able to operate with little or no emissions impact through carbon capture and sequestration, but to date, this technology has proven extremely costly. 118

In light of the environmental drawbacks associated with hydroelectric and nonrenewable alternatives, the non-competitive cost of carbon capture and storage, and the continually declining cost of solar PV and wind energy, it is likely that intermittent renewable resources will provide a significant or even dominant share of the future low- or non-emitting generation fleet. Based on the programs currently in place,119 that seems to be the direction that New York favors.

The most efficient approaches to achieving New York’s goals would involve internalizing the externalities associated with carbon dioxide emissions on an economy-wide (not just electric sector) basis.120 This would drive migration to cleaner generation and also decarbonization across sectors. For example, to the extent that electric vehicles cause less GHG pollution than gasoline vehicles, electric vehicles would enjoy a relative fuel cost advantage, which would naturally create incentives for a wide variety of market actors to accelerate their adoption of electric vehicles.

Whatever pathway is chosen to drive the large-scale generation in the direction of decarbonization, the mix of regulatory and market tools deployed, together with technological, market, and societal developments that cannot yet be anticipated with precision, will shape outcomes in ways that may or may not be predictable. The connection between REV and any of these outcomes is not yet clear. The distribution utilities that are economically regulated by the NYPSC—the entities whose regulatory framework is being reshaped by REV—generally do not own or operate generation, nor do they select the large-scale generation that will serve their distribution customers.

What more could REV do?

REV’s vision of electric distribution utilities as transactional platforms aligns well with the environmental imperative to use the electric system as a platform for decarbonizing the entire economy. However, although REV has gone some significant distance toward aligning utility earnings and business practices with emerging market realities and policy imperatives, more could be done to encourage the electric utilities to embrace their role as a decarbonization platform. Recent efforts to bring certain REV principles to the gas distribution business— notably the introduction of the concept of “non-pipelines solutions”121—may eventually dovetail well with this transformation, but more will be needed to ensure that the gas business changes, which should include significant contraction in the coming decades, are well coordinated with the changes that are needed in the electric sector. Giving distribution utilities a direct stake in a low-GHG-emissions future would be a transformative step, but for now that has not yet become a reality, nor has it been clearly directed by the NYPSC.

Under REV as currently promulgated, distribution utilities do not yet have an economic interest in minimizing carbon dioxide and other GHG output for the electric system, let alone the economy as a whole. In light of the opportunity that electric utilities have to shape the market in which their customers operate, this gap is problematic; if it is not bridged, New York will be considerably less likely to meet its environmental goals, and certainly less likely to do so in a manner that harnesses the full creative power of the marketplace.

To that end, the NYPSC and other state regulators considering REV-type reforms should consider opportunities to tie utility earnings opportunities to GHG emissions reductions writ large—or at a minimum, to more specific levers for emissions reductions. At this time, the only earnings opportunity called for in REV orders that represents a clear step in the direction of rewarding utilities for improved environmental outcomes at the scale of the entire marketplace is the EAM for improved energy intensity. While this is a laudable step, it also reflects an outdated understanding of the role of the electric system in driving environmental outcomes. It assumes that less electricity use should be the environmental goal, when in fact lower emissions overall are the goal. Less use of electricity can help reach this result—but so can a stable amount of electricity use, if the electricity comes from relatively lower-emitting sources (for example, due to strategically-timed consumption). Even increased electricity use does not necessarily preclude emissions reductions, if that increased use means that comparatively low-emitting electric energy is being substituted for higher-emitting fossil fuel combustion (i.e., environmentally beneficial electrification).

Indeed, thanks to environmentally beneficial electrification, the long-term future may be one of higher electricity consumption, and greater customer reliance on the electric grid may be critically important to the utilities’ financial health in the future.122 Instead of giving the utilities a small economic interest in a metric that could have perverse results, it might be preferable to give them a substantial economic interest in metrics that accurately capture what society needs them to accomplish. The Con Edison EAM collaborative has provided a welcome opportunity to begin envisioning how such metrics might operate. A GHG-reduction EAM could consist of a utility earnings opportunities that relates to a wide range of activities that their customers engage in in order to give the utilities a reason to want to be maximally supportive of such customer activities. For example, utilities could have earnings opportunities associated with their customers’ increased reliance on renewable generation, with the emissions efficiency of their customers’ electricity use, or with their customers’ deployment of environmentally beneficial electrification.123 It may not be readily apparent what the electric utilities can do to realize these earnings opportunities, but that is the purpose of the EAMs: to encourage utilities to innovate outside the approved programs that their regulator has already directed them to execute and for which they have been provided with funding.

Further, in light of the critical role of the electric system as a platform for economy-wide decarbonization, the NYPSC and other regulators would do well to think as holistically as possible about these earnings opportunities. For example, where possible, electric utilities should be directed to consider their customers’ full GHG footprint—at least as related to natural gas and electricity, but even, to the extent jurisdictionally possible, emissions associated with customers’ transportation habits. While electric utilities lack direct control over these nonelectric emissions sources, their systems may hold the key to reducing the emissions associated with them, and their business practices and rates may play a central role in shaping how customers change their electric consumption habits. Earnings opportunities that reward utilities for optimizing this potential of their system would give them reason and opportunity to think broadly about how customers and other market participants might accelerate their movement away from fossil fuels, and what they can do to facilitate that transformation.

QUICK NEWS, January 29: Time To Save The Trees; The Solar Tariff Imposed By Dirty Old Men; New York Reveals Big Ocean Wind Plans

“…[C]limate change is having a serious impact on the world’s forests. It’s estimated to cause 8 million acres of deforestation annually…[F]orests are a massive aid in the fight against climate change. They can store vast amounts of carbon extracted from the air and remove large amounts of greenhouse gases found in the earth’s atmosphere – as well as releasing oxygen. As a result, countries around the world are beginning to recognise the importance of reforestation and how it can help combat air pollution…At the beginning of 2018, [China announced plans to reforest an area] the size of Ireland…[It intends] to cover 23% of China’s landmass with forests by 2020…[It will also] start an ‘ecological red line…to end construction near rivers, forests, and national parks. Between 3.5 – 7 billion trees are cut down a year…[O]ne tree has the capability of producing almost 260 pounds of oxygen…” click here for more

“…[The just-imposed tariff on imported solar panels and cells] fits in with an important part of this administration’s general vision…[T]his is very much an administration of dirty old men…[and the solar tariff] will surely destroy many more jobs than it will create…[The U.S. is largely out of the solar panel-producing business…[and this tariff] won’t change it…[It is temporary and] won’t induce any long-term investments, and therefore won’t bring the U.S. solar panel industry back. What it will do, however, is put a crimp in one of the U.S. economy’s big success stories, the rapid growth of renewable energy…[It is clear that] hurting renewables is actually a good thing from [this administration’s] point of view…

Over the past decade or so there has been a remarkable technological revolution in energy production…[driven by cheap and abundant natural gas and] stunning reductions in the cost of solar and wind power…[They have] become cost-competitive with conventional energy, and their cost is still falling fast. And they also employ…around five times as many people…Why do Trump and company love dirty energy? Partly it’s about the money…[I]t’s good for G.O.P. campaign finance…Partly it’s about blue-collar voters, who still imagine that Trump can bring back coal jobs…[Maybe] it’s also about a kind of machismo, a sense that real men don’t soak up solar energy; they burn stuff…” click here for more

“…New York’s exhaustive master plan for] offshore wind energy foresees up to 5,000 people employed in and around a $6 billion industry by 2028, with annual health benefits from reduced emissions valued at up to $400 million…The Cuomo administration plan also makes clear that while offshore wind representing 2,400 megawatts and hundreds of turbines will be in the waters south of Long Island, none is expected to be visible from shore. The state expects more than 1.2 million homes could be powered by offshore wind…

[The 60-page report’s] studies examine everything from viable ports to turbine manufacturing and wind-farm construction and staging to the need for cables, pipelines and other infrastructure, as well as the impact on birds, bats and fish…The state determined that an area encompassing just over 1 million acres can accommodate wind turbines at least 21 miles from land…The area sits directly below a 79,000-acre wind farm already planned by Statoil called Empire Wind, which is expected to be operational by 2024…The state this year plans to offer the first procurement for at least 400 megawatts of offshore wind, with another 400 megawatts set for procurement in 2019, with a total 2,400 megawatts expected by 2030…” click here for more

Saturday, January 27, 2018

Offshore Wind Is Getting Bigger And Better

This envisioned 12 MW wind turbine, just over the horizon of what wind builders can do, is twice as big as the biggest now in service. It would be one machine that could provide enough power for 6,000 homes -- without the spew of even a breath of climate and health damaging emissions. From OffshoreWindBiz via YouTube

Time To Get Tough About Cleaner Cars

Now that emissions are falling – slowly – in the power sector, it is vital to focus on the much greater challenge of cleaning emissions from the transportation sector. From NationalSierraClub via YouTube

The Huge Irish Seas Energy Opportunity

“Amid growing opposition to land-based wind and solar-power projects, [Ireland’s] renewable energy industry is looking more to the sea as an alternative energy source…[T]he Government is under pressure from the EU and global demands to replace oil, coal and gas with renewable sources. Studies show the sea around Ireland has the potential to deliver 75% of all our electricity needs…Ireland’s marine environment is 10 times the size of its land mass and researchers say it can be its] greatest energy resource…[The] vast marine resource is gaining increasing attention. A country that was traditionally ‘sea blind’ is waking up to new opportunities…The relatively shallow waters along the east coast are suitable for turbines bedded in the sea floor…[But] floating wind turbine technology opens up possibilities of providing turbines in previously undeveloped deep waters off [the] south and west coasts…Work on tidal energy [and wave energy are] also moving ahead…[as Ireland moves ahead on its opportunity to become a global leader in marine renewables…” click here for more

Solar Booms In The Netherlands

“There were 40% more solar panels installed in the Netherlands in 2017, a sharp rise over the 13% increase the previous year…Continual price decreases, government subsidies and increasing awareness among consumers and companies all contributed the strong growth, the [just-released annual energy report] said. More than half a million households in the Netherlands now sport solar panels on the roof of their homes…[But there is much room for growth. Solar energy produces only 2.2% of the Dutch electricity supply and it is] one of the least solar power-reliant countries in the EU…[Research shows more than 75% of the major solar panel import and trading center country’s] energy needs could be supplied by solar power…The solar panel industry in the Netherlands has a workforce of 9,000 and estimated annual turnover of €3bn.” click here for more

“Ford Motor Co’s plan to double its electrified vehicle spending is part of an investment tsunami in batteries and electric cars by global automakers that now totals $90 billion and is still growing…That money is pouring in to a tiny sector that amounts to less than 1 percent of the 90 million vehicles sold each year…With the world’s top automakers poised to introduce dozens of new battery electric and hybrid gasoline-electric models over the next five years - many of them in China - executives continue to ask: Who will buy all those vehicles? …[Experts say Tesla faces real competition as the sector prepares to provide 15% to 20% of 2030] new vehicle sales in the United States…Investments in electrified vehicles announced to date include at least $19 billion by automakers in the United States, $21 billion in China and $52 billion in Germany…The largest single investment is coming from Volkswagen AG (VOWG_p.DE), which plans to spend $40 billion by 2030 to build electrified versions of its 300-plus global models…” click here for more

Thursday, January 25, 2018

Numbers Show The White House War On Science

“…[New numbers provide a stark portrayal of how the federal government's relationship with scientists has deteriorated since President Donald Trump took office…[T]he administration's skeptical view of science advisers is represented by diminished staffing at the White House and across various government agencies [according to Abandoning Science Advice One Year in, the Trump Administration Is Sidelining Science Advisory Committees from the Union of Concerned Scientists]…President Trump is the first president in four decades to not appoint a presidential science adviser, the report said. Less than a third of the White House Office of Science and Technology Policy is full, with only 38 of 130 total positions filled…[Only 20 of 77 positions have been filled] at the National Academies of Science…[A]t the same point in their respective administrations, President Obama had 62 roles filled and President George W. Bush had filled 51…The total number of science advisory committee meetings in 2017 also decreased 20 percent from 2016…” click here for more

U.S. Wind Rises

“Wind is expected to surpass hydroelectric power in 2018 as the largest source of renewable power in the U.S., according to the U.S. Department of Energy…Hydro power was one of the first technologies used to generate electricity, and has remained the nation's dominant source of renewable power even as wind and solar power have grown rapidly in the past few years…[But the Energy Department expects wind power capacity [in the U.S. is expected to grow by 9 percent in 2018 and 8 percent in 2019, as fewer hydro-electric plants] come online…Wind could then provide as much as nearly 7 percent of utility-scale power generation in the U.S. in 2018, up from 6.3 percent in 2017…[Hydro power would fall] from 7.4 percent in 2017 to 6.6 percent in 2019… click here for more

“…[The next big solar] boom region in the country could be the Midwest…[And the most recent satisfaction numbers with its community solar program suggest Minnesota could] lead the revolution…[T]hanks in part to Xcel Energy’s turnaround on community solar (which it fought for three years before changing its mind in the face of customer pressure), [Minnesota community solar] grew 76 MW since November, reaching 246 MW total…In addition, more than 88% of the program’s 2,200 residential community solar customers have seen significant savings on their bills, according to Xcel…By most measures, the program has been a rousing success…Xcel also reports that 87% of the 246 megawatts are commercial customers, meaning there’s still significant room for growth in the residential sector…” click here for more

Huge Near Term Opportunity In U.S. EV Charger Need

“…[Automakers have sold more than 727,000 plug-in hybrid or battery-powered cars in the U.S. since 2010 and annual sales could soar to 1.2 million by 2025, representing about 7% of total vehicle sales. But charging these vehicles may be a challenge. There are only about 16,300 publicly accessible, standard charging stations today with an average of three outlets each. About 2,200 stations are classified as very fast direct-current stations that can charge batteries in 30 minutes with 5,900 outlets. The nation will need about 100,000 to 200,000 charging stations to fulfill future demand…Despite efforts to build charging stations by Tesla, Volkswagen, the U.S. government and several start-ups, wide swaths of the nation are essentially no-go territory for electric vehicles…[Experts agree the inadequacy of public charging stations] could temporarily limit demand for electric cars…[Part of the obstacle to deployment is that] those stations might not be needed forever. With self-driving, ride-sharing vehicles expected to arrive within the next half-decade in major cities, many experts believe charging will be left to professional fleet managers — not individual drivers …” click here for more

Editor’s note: CPR and SMUD have continued the cutting-edge work in DER integration described here and just released new work on the accurate forecasting of DER penetrations.

Britain ruled the world on its army’s adage that “proper planning prevents poor performance.” California’s Sacramento Municipal Utility District (SMUD) is taking that idea to its distribution system. A recent SMUD estimate found customers and third-party developers spend from $150 million to $200 million annually on distributed energy resources (DERs) in its territory, which is more than the utility is investing in utility-scale renewables to meet the state’s 50% renewables by 2030 mandate. As DERs proliferate, SMUD, the sixth-largest municipal utility in the nation, is now testing new planning methods to maintain reliability and control costs, incorporating five steps laid out in a 2016 white paper from the Smart Electric Power Alliance (SEPA) and consultancy Black & Veatch.

In a follow-up study, SEPA and B&V summarized what SMUD gained from integrated DER planning, which includes combined heat and power, distributed photovoltaic solar, energy efficiency, behind-the-meter energy storage and electric vehicles. Seeing the interactive effects of the various DER and what the net effects were allowed SMUD a more holistic view that led to a planning procedure so comprehensive that even solar advocates are taking notice, arguing the process could provide lessons for utilities nationwide… click here for more

Plug-in Hybrids: The Cars that will ReCharge America by Sherry Boschert: "Smart companies plan ahead and try to be the first to adopt new technology that will give them a competitive advantage. That’s what Toyota and Honda did with hybrids, and now they’re sitting pretty. Whichever company is first to bring a good plug-in hybrid to market will not only change their fortune but change the world."

Oil On The Brain; Adventures from the Pump to the Pipeline by Lisa Margonelli: "Spills are one of the costs of oil consumption that don’t appear at the pump. [Oil consultant Dagmar Schmidt Erkin]’s data shows that 120 million gallons of oil were spilled in inland waters between 1985 and 2003. From that she calculates that between 1980 and 2003, pipelines spilled 27 gallons of oil for every billion “ton miles” of oil they transported, while barges and tankers spilled around 15 gallons and trucks spilled 37 gallons. (A ton of oil is 294 gallons. If you ship a ton of oil for one mile you have one ton mile.) Right now the United States ships about 900 billion ton miles of oil and oil products per year."

NOTEWORTHY IN THE MEDIA:
NewEnergyNews would welcome any media-saavy volunteer who would like to re-develop this section of the page. Announcements and reviews of film, television, radio and music related to energy and environmental issues are welcome.

Review of OIL IN THEIR BLOOD, The American Decades by Mark S. Friedman

OIL IN THEIR BLOOD, The American Decades, the second volume of Herman K. Trabish’s retelling of oil’s history in fiction, picks up where the first book in the series, OIL IN THEIR BLOOD, The Story of Our Addiction, left off. The new book is an engrossing, informative and entertaining tale of the Roaring 20s, World War II and the Cold War. You don’t have to know anything about the first historical fiction’s adventures set between the Civil War, when oil became a major commodity, and World War I, when it became a vital commodity, to enjoy this new chronicle of the U.S. emergence as a world superpower and a world oil power.

As the new book opens, Lefash, a minor character in the first book, witnesses the role Big Oil played in designing the post-Great War world at the Paris Peace Conference of 1919. Unjustly implicated in a murder perpetrated by Big Oil agents, LeFash takes the name Livingstone and flees to the U.S. to clear himself. Livingstone’s quest leads him through Babe Ruth’s New York City and Al Capone’s Chicago into oil boom Oklahoma. Stymied by oil and circumstance, Livingstone marries, has a son and eventually, surprisingly, resolves his grievances with the murderer and with oil.

In the new novel’s second episode the oil-and-auto-industry dynasty from the first book re-emerges in the charismatic person of Victoria Wade Bridger, “the woman everybody loved.” Victoria meets Saudi dynasty founder Ibn Saud, spies for the State Department in the Vichy embassy in Washington, D.C., and – for profound and moving personal reasons – accepts a mission into the heart of Nazi-occupied Eastern Europe. Underlying all Victoria’s travels is the struggle between the allies and axis for control of the crucial oil resources that drove World War II.

As the Cold War begins, the novel’s third episode recounts the historic 1951 moment when Britain’s MI-6 handed off its operations in Iran to the CIA, marking the end to Britain’s dark manipulations and the beginning of the same work by the CIA. But in Trabish’s telling, the covert overthrow of Mossadeq in favor of the ill-fated Shah becomes a compelling romance and a melodramatic homage to the iconic “Casablanca” of Bogart and Bergman.

Monty Livingstone, veteran of an oil field youth, European WWII combat and a star-crossed post-war Berlin affair with a Russian female soldier, comes to 1951 Iran working for a U.S. oil company. He re-encounters his lost Russian love, now a Soviet agent helping prop up Mossadeq and extend Mother Russia’s Iranian oil ambitions. The reunited lovers are caught in a web of political, religious and Cold War forces until oil and power merge to restore the Shah to his future fate. The romance ends satisfyingly, America and the Soviet Union are the only forces left on the world stage and ambiguity is resolved with the answer so many of Trabish’s characters ultimately turn to: Oil.

Commenting on a recent National Petroleum Council report calling for government subsidies of the fossil fuels industries, a distinguished scholar said, “It appears that the whole report buys these dubious arguments that the consumer of energy is somehow stupid about energy…” Trabish’s great and important accomplishment is that you cannot read his emotionally engaging and informative tall tales and remain that stupid energy consumer. With our world rushing headlong toward Peak Oil and epic climate change, the OIL IN THEIR BLOOD series is a timely service as well as a consummate literary performance.

Review of OIL IN THEIR BLOOD, The Story of Our Addiction by Mark S. Friedman

"...ours is a culture of energy illiterates." (Paul Roberts, THE END OF OIL)

OIL IN THEIR BLOOD, a superb new historical fiction by Herman K. Trabish, addresses our energy illiteracy by putting the development of our addiction into a story about real people, giving readers a chance to think about how our addiction happened. Trabish's style is fine, straightforward storytelling and he tells his stories through his characters.

The book is the answer an oil family's matriarch gives to an interviewer who asks her to pass judgment on the industry. Like history itself, it is easier to tell stories about the oil industry than to judge it. She and Trabish let readers come to their own conclusions.

She begins by telling the story of her parents in post-Civil War western Pennsylvania, when oil became big business. This part of the story is like a John Ford western and its characters are classic American melodramatic heroes, heroines and villains.

In Part II, the matriarch tells the tragic story of the second generation and reveals how she came to be part of the tales. We see oil become an international commodity, traded on Wall Street and sought from London to Baku to Mesopotamia to Borneo. A baseball subplot compares the growth of the oil business to the growth of baseball, a fascinating reflection of our current president's personal career.

There is an unforgettable image near the center of the story: International oil entrepreneurs talk on a Baku street. This is Trabish at his best, portraying good men doing bad and bad men doing good, all laying plans for wealth and power in the muddy, oily alley of a tiny ancient town in the middle of everywhere. Because Part I was about triumphant American heroes, the tragedy here is entirely unexpected, despite Trabish's repeated allusions to other stories (Casey At The Bat, Hamlet) that do not end well.

In the final section, World War I looms. Baseball takes a back seat to early auto racing and oil-fueled modernity explodes. Love struggles with lust. A cavalry troop collides with an army truck. Here, Trabish has more than tragedy in mind. His lonely, confused young protagonist moves through the horrible destruction of the Romanian oilfields only to suffer worse and worse horrors, until--unexpectedly--he finds something, something a reviewer cannot reveal. Finally, the question of oil must be settled, so the oil industry comes back into the story in a way that is beyond good and bad, beyond melodrama and tragedy.

Along the way, Trabish gives readers a greater awareness of oil and how we became addicted to it. Awareness, Paul Roberts said in THE END OF OIL, "...may be the first tentative step toward building a more sustainable energy economy. Or it may simply mean that when our energy system does begin to fail, and we begin to lose everything that energy once supplied, we won't be so surprised."

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